The Ides of March and the Fed exit strategy John Hempton. I don’t agree with this (that the financial system was not insolvent, particularly now that I have researched the crisis even more deeply) but I am willing to be persuaded that the dollar bearishness short term is overdone. Anytime consensus is this strong that a trade is one way, it is subject to abrupt short-term reversal. But trying to trade that view can get you killed.

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This passage from the article, commenting on traders with stellar performance, is most insightful:

Learning was encouraged by the compensation scheme at the trading company where they worked. Banks, with their yearly bonuses, may attract traders with an appetite for risk rather than prudence; but the traders in our study received only profit sharing, so if they lose money for the firm they lose it for themselves. These traders have, therefore, a strong incentive to damp the swings in their earnings.

These findings offers pretty conclusive evidence that the performance-enhancement hype used to justify multi-million dollar bonuses is just that, a bunch of self-serving, over-hyped bullshit.

I see the writer, John Coates, is a former trader who is now a research fellow in neuroscience.

I personally have great hope in neuroscience. Essentially what it does is to pull back the curtain on the brain, allowing us to see what sort of chemical and electrical phenomenon correspond to certain human behaviors. It breaks down the barrier between the natural and the behavioral sciences, and hopefully this ability to link measurable natural phenomenon to specific human behaviors will allow a flushing out of some of the myths that have been perpetrated within the behavioral sciences, especially those that are used to justify greed and selfishness.

One half-truth that has already become a casualty of neuroscience is the “red in tooth and claw” fiction hyped by New Atheists like Ayn Rand and Richard Dawkins.

In their perverse universe, and their depraved reading of Nietzsche, the “Will to Power” (read high testosterone levels) is of and by itself deemed sufficient for exceptional performance. But as Coates points out, the “Will to Power” is by itself not sufficient. “A high tolerance for risk – predicted by pre-natal testosterone exposure – is needed,” he says, “but, like height or speed in sports, may count for little without proper training and management.”

Nietzsche figured all this out without the aid of modern neuroscience. As Jacques Barzun puts it:

In health man feels within him the will to power, a drive to action and achievement, including self-mastery that will characterize the superman and establish a new ethos.

What the New Atheists and their Wall Street acolytes do is to leave out the part about achievement and self-mastery and go straight to the superman part. They take Nietzsche and turn him on his head. As Barzun goes on to explain, Nietzsche formulated his philosophies in reaction to hollow philosophies like those espoused by the New Atheists:

Nietzsche’s assault on the character of both the mass man and the intellectual conformist was launched in the 1870s and 1880s, a time when the booming of industry, the ruthlessness of capitalist enterprise, and the ravages of renewed imperialism were at their height, filling the air with rejoicing and self-congratulation…
–Jacques Barzun, From Dawn to Decadence

And since the escalation of the war in Afghanistan is on everyone’s mind now that Obama has completely capitulated to the neocons, it’s germane to point out that the neocons are another group made up of individuals high on testosterone but short on gray matter. Andrew Bachevich picked up on this in The New American Militarism: How Americans Are Seduced by War:

From his editorial command post at “Commentary” (and through organizations such as the Committee on the Present Danger, in which he figured prominently), Podhoretz did much to create and refine the fiercely combative neoconservative style. That style emphasized not balance (viewed as evidence of timidity) or the careful sifting of evidence (suggesting scholasticism) but the ruthless demolition of any point of view inconsistent with the neoconservative version of truth, typically portrayed as self-evident and beyond dispute.

the fiercely combative Global Warmmonger style. That style emphasized not balance… or the careful sifting of evidence … but the ruthless demolition of any point of view inconsistent with the Global Warmmonger version of truth, typically portrayed as self-evident and beyond dispute.

DownSouth, let’s not get carried away with the Alpha Male Article and the “wonders” of neuroscience.

The conclusions from the Alpha Male article are predicated on Finger Forecasts. Specifically comparing the lengths of index fingers and ring fingers.

The Coates article does not even reference this fact, which is shoddy. [He does give a link to the underlying study. But who has the time to be bothered reading the underlying study?!]

One would get the impression from the article that this is some serious neuroscience research going on…

It’s Finger Forecasting! Phrenology of the Hand. An extension of Palm Reading to the fingers. It’s research based om the premise that the ratio of the index finger to the ring finger can tell you not only about trading performance….but also about can be used to predict the the athletic prowess of females, number of sexual partners, ADHD, future prison time, obesity, depression and autism.

WOW!

[I’ll pause, so the reader can give his or fingers a look….Who knew that the ratio between index fingers and ring fingers would be so important?!?!]

I’m certainly not saying Finger Forecasting is all bullshit. There is some serious, and credible research on the subject. But I am saying that there are A LOT of conclusions being drawn therefrom and that one should think twice before getting carried away. Also, the author of the article, John Coates, should have alluded to the fact that his conclusions are being drawn from Finger Forecasting. For some reason, he didn’t. [But he does allude to his Neuroscience Fellowship at the end of the article.]

Finally, while Coates is at it, he could also step into the minefield of Race and address the fact that Blacks and Asians have been found to have low digit ratios.

Since Coates finds digit ratios to be so informative, then I suppose he also has some sweeping opinions about Blacks and Asians as well. Coates should step up to the plate like a true Alpha Male Neuro-Scientist Research Fellow and do a follow-up article about what Finger Forecasting says about the underlying differences between Blacks, Whites and Asians.

Who knows, maybe Coates might even publish a seminal work on the theory that neuro-scientists with high digit ratios make for the very best phrenologists… as those index fingers and ring fingers are crucial for probing the surfaces of human skulls. From this Skull Touching Research, we might learn all about sexual appetites, risk taking and mental illnesses along racial and ethnic lines.

Dan my boy, you really have gone off the deep end. Is there anything you will not stoop to in order to try win an argument?

For those interested in gaining a little more insight into the work Coates and other neuroscientists like him are doing, and not some fictionalized account created out of thin air, here’s a link to an article co-authored by Coates that was published in the proceedings of the National Academy of Sciences:

I too recommend reading the referenced article and not accepting your caricature, which sounds like something Limbaugh, O’Hanity, O’Reilly, Coulter or some other moronic right winger nut job cooked up.

I suppose this is the passage that gives you such great umbrage:

Sharpe Ratios higher than the broad market present an
anomaly for the Efficient Market Hypothesis. How can the
experienced traders in our cohort outperform the Dax? To answer this question we began by looking at a subset of our sample, n =47, which had previously taken part in a study which involved measuring a surrogate marker of pre-natal androgen exposure, the second to fourth finger length ratio (2D:4D) [7]. A lower 2D:4D, i.e., a longer ring relative to index finger, has been found to correlate with higher levels of foetal testosterone [9], the explanation for the relationship deriving, according to some researchers, from the fact that digit growth and gonadal development are linked by the common influence of the hoxa and hoxd gene clusters [10,11]. In our earlier study we found that
lower 2D:4D among high frequency traders predicted higher long term profitability and a greater number of years of survival in the business [7]. We did not attempt to determine just how foetal androgens affect a trader’s ability to make money, but we suggested, based on other studies, both animal and human, that the androgens may increase risk preferences [12], confidence, speed of visuo-motor scanning, or physical reactions.

What is it about this that you find so threatening? Pre-natal endocrinology and its biological influence on both physical and psychoneurological traits is something that has been observed for a long time. (And, I might also point out, adds yet another entire layer of complication to the perennial genetics-rearing controversy.)

Here is but one example from a psychology textbook that is over 20 years old:

In 1974, they (Imperato-McGinley and colleagues) reported on a unique subgroup of male pseudohermaphrodites with 5a reductase deficiency, an autosomal recessive genetic anomaly. In this condition, the prenatal and neonatal exposure of the brain to testosterone is that of the normal male, but the enzyme deficiency produces ambiguous external genitalia…

Imperato-McGinley’s research is compatible with the hypothesis that in humans, prenatal androgens may influence a variety of dimorphic behaviors…
–Richard C. Friedman, Male Homosexuality: A Contemporary Psychoanalytic Perspective

There is certainly nothing new and hardly anything controversial about what Coates wrote, and yet you take it and pervert it into something evil and nefarious.

Like I said initially, you’ve totally lost it. You’re completely out of your water here, bloviating on something on which you have little if any knowledge.

Down South..
Suggest you read the Blank Slate by Stephen Pinker.
Throwing Dawkins in with Ayn Rand is not really fair. One is a genuine scientist the other a novelist.
Yes we are more than a bag of genes we have evolved a consciousness. The two interact in ways we are only just beginning to understand. Neuroscience and psychology are very much at an early dawn, genetics less so.

Red in tooth and claw is too simplistic a description of Dawkins. What i presume you worry about is use of biological determinism to justify greed and selfishness, or racism. (think Nazi Germany, Gordon Gecko). Do you suggest we ban the discussion and ignore it and pretend we are all born the same and blank. That is obviously not the case. Denial is not the answer on this

Consciousness means we have moved to another evolutionary level and we can now try to extend altruism circles and counter our ancient genetically driven tendencies which dont help our long term future in a global world. Studying the wiring in the brain wont help per se as we know we are conscious its what we do with it that counts.

Wall Street has on its payroll its millionaire scientists like Richard Dawkins, its millionaire artists like Damien Hirst, its millionarie preachers like Pat Robertson and its millionaire entertainers like Rush Limbaugh, all with similar rock-star status.

When I think of these guys I can’t help but be reminded of Salieri, the once-famous composer from the movie Amadeus,

Democracy’s task in the field of art is to make the world safe for elitism. Not an elitism based on race or money or social position, but on skill and imagination.

As to calling Dawkins a “genuine scientist,” I very much disagree. The best one could say about Dawkins is that he has Milton Friedman’s split personality as described by Paul Krugman: “Friedman the economists’s economist,” “Friedman the policy entrepreneur,” and “Friedman the ideologue.” Each personality battles cognitively with the other.

My biggest beef with Dawkins, however, is that he preys on people who have been victimized by religion. I don’t know why life’s hardships strengthen some and destroy others. Martin Luther King gives a most poignant testimonial of one whose hardship has made stronger:

Due to my involvement in the struggle for the freedom of my people, I have known very few quiet days in the last few years. I have been arrested five times and put in Alabama jails. My home has been bombed twice. A day seldom passes that my family and I are not the recipients of threats of death. I have been the victim of a near-fatal stabbing. So in a real sense I have been battered by the storms of persecution…

As my sufferings mounted I soon realized that there were two ways that I could respond to my situation: either to react with bitterness or seek to transform the suffering into a creative force. I decided to follow the latter course.

Dawkins, on the other hand, gears his entire appeal towards those who are casualties of and have reacted with bitterness towards religion. And without a doubt there are many millions of these, making Dawkins’ potential audience quite large.

I haven’t read The Blank Slate, but I will. I’ve been watching some of Pinker’s lectures on the Science Network and find them most fascinating. However, if Wikipedia’s description of The Blank Slate is accurate, I don’t see anything in it that contradicts my position:

[It] is a best-selling 2002 book by Steven Pinker arguing against tabula rasa models of the social sciences. Pinker argues that human behavior is substantially shaped by evolutionary psychological adaptations.

I am in the David Sloan Wilson, Jonathan Haidt and Peter Turchin camp, which asserts that genes offer a “first draft” upon which culture and environment then exert their influence. This is a long way from the tabla rasa that Pinker criticizes, but also a long way from the genetic determinism advocated by Dawkins in The Selfish Gene.

I loved The Blank Slate. I still don’t agree with Pinker on everything, but in the years since I read the book, I find my views dovetailing with his more and more. It is still a topic for which I feel real answers are always going to be few and far between, but his analysis is insightful and prompts a lot of useful questions.

The (whoa! I’m getting bold type here) Guardian article on hygiene through dirt is reaffirmation of the aphorism “too much of good thing is not good” or even ‘don’t worry, be happy’ (as the child studiously observing the finer attributes of mud is whole-heartedly, if somewhat unknowingly, embracing). That we are descendent’s of survivors of a world which even the most basic advantages of sanitation were unknown, should leave one to conceive that not all applications of cleanliness are created equal, that dirt and other forms of a non-hygienic environment is not only the harbinger of ill, but a necessity of health.

But then, like the child in the picture, I’ve always had a special appreciation for dirt; from dust we arose and to dust we will return, Clorox be damned!

Dan Duncan, what does the Finger Forecasting say about the aye-aye’s of Madagascar? An aye-aye is an interesting animal with very long middle fingers. And to say someone gives you the aye-aye should be an insult in my book.

As for the superman, I would like to see him go up against superrat, supercat, superlion, superdog, supercloudleopard, superdugong and other superheroes.

Would like to ask you if you could try and get a proponent of MMT, either Billy Mitchel (billy blog), L Randall Wray or Warren Mosler to come to your site and have a Q&A with bloggers or a debate with one of your usual guests about government debt and the deficit. In my study of MMT (just discovered it the last couple weeks) it is clear to me that they believe that mainstream economic discussions are incorrect regarding our debt and deficit. The problem seems to be one of using gold standard paradigm language when talking about our modern fiat system.

I think this issue is of paramount importance because if the MMT proponents are right, we do not need to be dithering regarding direct job creation programs, govt spending or anything else which raises the ‘debt’.

I think your readers would be thankful for the opportunity to hear what these men have to say. I know I would.

Down South
I will check your links. I dont think you have given Dawkins a fair crack. i know he has a very different reputation in the US but in the UK he is a national treasure and his aim is not to prey on the religiously bitter. It was a mistake on his part to take on religion with his book God Delusion, all rather futile. Suggest you dig past the propoganda on Dawkins.

His debate with Joan Roughgarden in Session 3, his presentation in Session 7, and his debate with Jim Woodward and Melvin Konner in Session 9 give a great deal of insight as to what Dawkins is all about.

All three of these sparring opponents are scientists and I believe Woodward and Konner are atheists.

Charles Harper, who is Senior Vice President of the John Templeton Foundation, also spoke at the conference. But Harper is no match for Dawkins. Dawkins can dispatch him without even breaking a sweat.

But Roughgarden, Woodward and Konner were not so easily dismissed.

In the Science Network’s 2007 and 2008 Beyond Belief conferences, David Sloan Wilson, Peter Turchin and Jonathan Haidt gave presentations, and of course they have practically made careers of rebutting the genetic determinism Dawkins championed, as well as his anti-religous bigotry.

Down South … interesting link. Agree Dawkins has become more dogmatic over time and I think he did stray of the path with the God Delusion. I dont believe he did it to gain audience he had that already. His body of work is however more than that novel. In fact i think we are not that far apart. To me its obvious that culture (including religion) and genes are not separate each has applied pressures on the other. Picking the influences apart will be interesting to watch. FYI i studied molecular genetics to PhD level so i do have some theoretical background or dogmatic training whichever way you see it!!

I think labeling Dawkins a genetic determinist needs a little clarification. There is no doubt he would never argue that we could get to the point where we could predetermine specifics about behavior just from having a complete map of our genome. He would however say, and I agree, that everything we become is because of our DNA. There is nothing else that it could be. All our emotions and behavioral actions are the result of neural activity, which is the result of interactions of neural tissues, which is composed of proteins and other compounds whose development is directed by DNA. He would also say that in some sense DNA has “goals” which is to get as much of itself as it can to the next generation.